The legal squabble is really a proxy battle over whether the agency will be subject to meaningful political oversight.

For a preview of what policy battles will increasingly look like as they are separated from the legislative arena, consider the current leadership showdown at the Consumer Financial Protection Bureau (CFPB).

As of this morning, two different people are claiming to be the agency's acting director.

The first, Leandra English, was appointed deputy by director Richard Cordray, who stepped down last week. Under the Dodd-Frank legislation that created the financial regulator, the director has the authority to appoint a deputy. The legislation says that the deputy shall serve as acting director if the director is absent or unavailable, a condition that might seem to describe Cordray.

But Dodd-Frank isn't the only potentially relevant legislation. The Federal Vacancies Reform Act of 1998 allows the president to appoint an individual who has previously been confirmed by the Senate as acting director when a leadership vacancy at a federal agency. With Cordray out, a vacancy clearly exists, and President Trump announced weeks ago that he would tap Mick Mulvaney, already serving as White House Office of Management and Budget director, to fill the post. Mulvaney showed up to work at the CFPB this morning, stepping into the director's office. He brought donuts.

English, in turn, has already sent out Thanksgiving greetings to CFPB staff, signing the email "Acting Director." More importantly, she has filed suit against Trump and Mulvaney, arguing that she is the agency's rightful director. Sen. Elizabeth Warren, who was instrumental in the creation of the agency, is backing English's claim. (She has reportedly not attended senior staff meetings, however.)

There is legitimate tension between the two claims, but on the merits, Trump and Mulvaney appear to have the better argument, for reasons that Hoover Institution Research Fellow Adam White lays out in a post at Yale Law's Notice & Comment. To assume that Dodd-Frank gives an outgoing director the ability to name an acting successor essentially requires one to assume that it effectively renders the Vacancies Act null. Typically, courts attempt to read statutes in a way that allows them to coexist rather than to clash. In this case, that means that Trump and Mulvaney have the stronger case.

Indeed, the CFPB's own general counsel, Mary McLeod, agrees that Trump has the authority to fill the position. "I advise all bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB," McLeod wrote in a memo to staff. McLeod was hired under Cordray.

In a larger sense, however, the fight over the legal particulars is a proxy battle over the future of the financial regulator, and whether it will be allowed to operate independent of democratic oversight.

Sen. Warren, the agency's architect and chief advocate, all but says as much in an interview with The Washington Post. Mulvaney, like most congressional Republicans, has been critical of the agency, and if he and Trump are allowed to prevail, she says, "The agency will be headed by someone who fundamentally doesn't believe in its mission."

Well, yes. That is more or less the point. And it is the inevitable risk of setting up a highly politicized regulatory agency that is designed in large part to act in ways that are unchecked by political or legislative review. The agency's single-director structure was ruled unconstitutional by a federal court last year in an opinion declaring the position to be "unchecked" and "unaccountable." A former aide to Barney Frank — the Frank of Dodd-Frank — recently wrote that its novel funding mechanism (it is funded via the Federal Reserve) was specifically designed to avoid congressional oversight. CFPB was built to be untouchable. Cordray himself was initially appointed by President Obama during a Senate recess that was not actually a recess. The Supreme Court ruled that the appointment was unconstitutional.

In theory, its structure is intended to insulate the agency from political influence, and that its considerable powers are necessary to perform its duties. Instead, its design merely guarantees that the battle for control moves to other forums, like the courts. Divorcing policy battles from Congress and the legislative process does not mean that those battles are not fought. They just change venues.

The fight over the director, then, is just a version of the fights that have been waged over CFPB from the beginning: How much power should it have? And what sort of external checks should its power be subject to, if any?

What Warren and the agency's other backers really seem to want is for the CFPB to be able to operate in a highly politicized manner without any meaningful political checks on its behavior. It is a blatant attempt to exercise power without accountability.

As Jonathan Adler notes at The Volokh Conspiracy, the courts may not resolve this particular fight if the Senate confirms a new Trump appointed director. But regardless of how this particular bit of bureaucratic drama plays out, the fundamental questions it raises about the agency and the scope of its independence and authority are likely to persist.

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The financial crisis partly resulted from a breakdown of traditional mortgage lending standards, so creating new rules for the industry has been one of the CFPB’s highest-profile priorities. The Bureau has accomplished two big changes. In 2013, it set new standards for the mortgage market, requiring most lenders to verify borrowers’ income and ability to repay loans and discouraging many types of exotic mortgages?such ones boasting introductory “teaser” interest rates?that led to some of the worst abuses of the financial crisis. And in October 2015, the Bureau tackled another thorny area: Simplifying the disclosures that borrowers receive when they take out a loan.

You’re an uninformed idiot that just spits out 3-4 platitudes you heard.

Big banks must go through an expensive stress test every year now. They are expensive and have hurt their credit rating. There are only about a dozen SIFIs (Systemically Important Financial Institutions) that are too big to fail. No small/medium bank has to do one.

For the first time in seven years, all 34 of the nation’s biggest banks were granted permission to buy back stock or pay dividends to shareholders, according to the annual stress test results released Wednesday by the Federal Reserve. The verdict is part of the Fed’s yearly financial health checkup on banks like JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) to determine if they are strong enough to weather a severe financial crisis while still being able to continue to lend to consumers and businesses.

Big banks like 5th3rd do not have to comply with the law, Consumer Financial Billing Act, that Congress has mandated for them. I just had Amanda at CFPB tell me that about my credit card dispute. The concern about protecting consumers from bank fraud is a lie.

Thrived? There is one – one! – regional credit union left out here in our little burg of 47,000. Even the national biggies have scaled back their ATM locations to their own local offices. All since Dodd-Frank. With “success” like this, who needs loan sharks and Green Dot, I mean, except, you know, everyone.

Would you believe the hippies at the Wall St Journal or the spokesman for community banks?

“Dodd-Frank?that term?became the poster child for every regulatory ill that’s been foisted onto community banks,” said Camden Fine, president of the Independent Community Bankers of America, which represents thousands of small banks. “There are regulatory burdens that community banks face today that are real, but had nothing to do with Dodd-Frank,” he said, adding that in any case, low rates are a bigger issue for small banks.

Community bank profitability is up. The FDIC’s most recent report showed community banks’ net income rose 10.4 percent from last year. Its 2016 quarterly profile on FDIC-insured banks found community bank revenue and loan growth outpaced the industry at large. Since Dodd-Frank was passed in 2010, aggregate profit of FDIC-insured banks, including community banks, has followed an upward trajectory.

Bank lending is up. The same FDIC report found the annual loan growth rate at community banks outpaces that of non-community banks. Loan balances for community banks rose by 7.7 percent over the past 12 months. This is more than twice the loan growth in large banks, which was 3.3 percent. Over 75 percent of community banks increased their loan balances from a year ago.

The agencies purpose was to suppress ‘excess’ lending by ‘greedy’ banks, and you’re citing increased bank profitability and lending as evidence of its success?

Do you even know what the CFPB does? Does a self appointed libertarian like you support the ad hoc outlawing of financial instruments it doesn’t like and selective imposition of capital controls based on popular opinion?

Own it buttplug: you’re basically a Fabian socialist. There’s no regulation or control or govt expansion that one could propose that you wouldn’t support. The CFPB is a perfect case of a redundant, selective, captured agency who’s structure is clearly unconstitutional and is designed to be unaccountable. To support it is good be oneself away as a thoroughgoing statist.

Of course, when banks do this naturally so as to avoid a bad investment, and it results in too many brown people not getting mortgages, idiots scream racism and lobby the gubmint to force the banks to lend to risky borrowers anyway.

Some rightwing troll invented this alternate universe explanation for the 2008 financial crisis JUST so you guys could blame it on black people. It’s almost impressive in its shamelessness and narrative uniformity.

There was the Carter Monetary Reform Act of 1980, Clinton’s deregulation of state banks laws, his CFTC (Glass Steagall Repeal) act, Bush’s killing of the Net Capital Rule among others.

Before Carter banks could not pay interest on money market accounts.

It allowed banks to merge.[citation needed] It removed the power of the Federal Reserve Board of Governors under the Glass?Steagall Act to use Regulation Q to set maximum interest rates for any deposit accounts other than demand deposit accounts (with a six-year phase-out).[2] It allowed Negotiable Order of Withdrawal accounts to be offered nationwide.[2] It raised the deposit insurance of US banks and credit unions from $40,000 to $100,000. It allowed credit unions and savings and loans to offer checkable deposits. It allowed institutions to charge any loan interest rates they chose

Bullshit. Requirements have loosened; however, down payment % on conventional mortgages was stable into the 90s, when it went down, the *increased* consistently from the mid 90s through the mid 2000s, during the peak of the boom. So as this ‘rabid deregulation’ was happening, mortgage borrowers were getting less leveraged. Even on subprime mortgages, there was only a slight decline in down payment %, which is amazing given how low interest rates got and how expensive housing got (in absolute terms, average subprime down payments soared).

That’s some good reasoning there. “Scoreboard, yo: I win.” I pray you don’t judge Supreme Court decisions with the same rigor (though with how stupid you are we’re better off if you simply never offer an opinion on anything ever again).

Wallison’s dissent is essential for anyone who wants to know why the bubble happened in the first place. Where it falls short is explaining how such an event touches off a worldwide systemic crisis. The majority Republican dissent does more of that, but it’s nearly as deep and therefore less useful.

As for the scoreboard result, it’s painfully obvious that the majority opinion is a political document designed to justify the regulations offered up under Dodd-Frank. It’s basically useless as an academic exercise, and offers nothing about preventing future events.

Barney Frank was the principal advocate in Congress for using the government’s authority to force lower underwriting standards in the business of housing finance. Although he claims to have tried to reverse course as early as 2003, that was the year he made the oft-quoted remark, “I want to roll the dice a little bit more in this situation toward subsidized housing.” Rather than reversing course, he was pressing on when others were beginning to have doubts.

It is government’s fault for offering a housing finance program without making an effort to maintain underwriting standards. His most successful effort was to impose what were called “affordable housing” requirements on Fannie Mae and Freddie Mac in 1992. Before that time, these two government sponsored enterprises (GSEs) had been required to buy only mortgages that institutional investors would buy–in other words, prime mortgages–but Frank and others thought these standards made it too difficult for low income borrowers to buy homes. The affordable housing law required Fannie and Freddie to meet government quotas when they bought loans from banks and other mortgage originators.

At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton in 2000 and to 55% under Bush in 2007. Despite Frank’s effort to make this seem like a partisan issue, it isn’t.

*Derp! Go Team Blue. Have government make a problem that can only be solved by more government. It wasn’t the teaser rates – it was the government forcing the banks to make risk loans by saying they would backstop them.

When people say ‘forced’ I think a more accurate word would be ‘heavily incentivized’ and I’ve seen elsewhere that you yourself used a figure of around 25% of those loans were at the very least attributable to the governments own policies on who should receive loans.

Actually, retard, the government used the big 3 agency rating to assess weighted capital adequacy of banks, pertaining to capital reserve requirements. And banks had no choice but to abide by regulator imposed ratings. If a bank wanted to swap a bad AAA mortgage for a safer business loan, it couldn’t without suffering a huge loss because ratings-based capital regulations effectively dictated what banks could sell or by at the margin without disrupting regulatory compliance.

Of the 28 million subprime mortgages over 20 million traveled their way through Fannie or Freddie or some FHA program. What bank in their right mind is going to willingly give a loan to someone they know isn’t going to be likely to pay it back. Well when the GSE’s buy the loans from the back there is no worry.

I think her cheekbones say that a few drops of Cherokee blood are not outside the realm of possibility.

What the debate over the authenticity of her native heritage misses is that she’s not really the type of Native American that institutions tended to have in mind when they set up these affirmative action programs – i.e. upper-middle-class white ladies who can plausibly claim to have an ancestor who raped a native.

I think the idea was to help out natives living in poverty on reservations and the like. You know – people who are disadvantaged in some way by the government’s past treatment of natives.

Except one is elected to appoint executive heads and the other is a bureaucrat who is not accountable to the electorate. What is amazing is how anyone could find equal fault between the two parties here

The CFPB is a socialist piece of shit, and it needs to be abolished like the individual mandate.

The idea of an unaccountable bureaucracy to protect the American people from the home loans they want is preposterous on its face. It also couldn’t survive if it functioned as it’s supposed to do.

There’s something like a regulation cycle that closely tracks the credit cycle. The government heaps regulation on the heels of a credit crunch, but as the desire for new loans rises with the growing economy, congress deregulates the financial sector again. It seems to happen with every boom and bust–going back before the mortgage backed security crisis, before the S&L crisis, etc. all the way back to the days of Teddy Roosevelt and maybe before that.

Regulatory agencies that manage to survive only do so by being colonized by the people they’re supposed to regulate and/or doing nothing to get in the way of voters who want home loans, etc. during a growth spurt. And yet that’s what the CFPB is supposed to do–stop banks from offering credit to people in good times.

As Millenials move out of their parents’ basements, the CFPB’s purpose will continue to become increasingly unpopular. It should be unpopular. Their job is supposed to be to prevent the next recession through regulation. It’s a fool’s errand. The CFPB can’t be effective unless it’s unaccountable, and congress can make them accountable whenever they want. Meanwhile, the pressure for congress to hold them accountable increases as the economy grows. Best case scenario: the whole house of cards comes crashing down soon. Worst case scenario: the CFPB survives by becoming completely ineffective at doing its job.

First, the ‘ion’ part becomes ‘un’ because the last part of words ending with “tion” tends to be an unstressed syllable. In English, unstressed vowels are almost always an “uh” sound (Make a sound like you’re saying uhhhhhhhhh. You’d almost certainly in English be making that vowel sound).

Why the ‘t’ sound becomes a ‘sh’ sound I have less of a guess. My best guess with no data to aid me? That the word suffix doesn’t carry much information, and the sound does not need to distinguish itself from other words (So, there are very fewm if any, pairs in English like ‘situation’ and ‘situashun’ where the sounds are needed to distinguish the two words).

Now, bare with me here, the ‘t’ sound is a full stop, and thus requires slightly more time to make than a sibilant such as ‘s’ (like in /s/un) or ‘sh’ (like in ‘/sh/ank’). So, the sound transforms into a sibilant, but the closet should actually be /s/. My guess is that it’s easier to relax and get to position to do the “uh” sound I mentioned earlier. That is, less movement is needed. So, over time people relax their pronunciation until they get ‘shun’ instead of pronouncing ‘ti-un’.

I would switch past NPR for three or four seconds at a time during my half hour commute this morning, each time it was clear that NPR was acting like the captain of the Titanic had left the bridge and we were heading towards icebergs.

The whole bailout and the subsequent legislation was and is bullshit. The risk-loving banks and lenders, the MBSs, the stupid push to limit pricing for credit risk, and the idiocy of consumers, lenders, regulators, etc. all contributed to the disaster, but did we learn anything? It’s happening again, thanks to the bailout and artificially low rates and credit standards. Nothing has changed.

Bailout II? Probably. Might be the final straw. Along with whatever stupidity that accompanies the education bubble.

All you need to know is the bill is Dodd Frank. That is right Chris “Friends of Angelo” Dodd and Barney “Thewe is nothing Wong with Fweddie and Fwannie” Frank made this. If they put into place a replacement system you know it is hosed.

All you need to know is the bill is Dodd Frank. That is right Chris “Friends of Angelo” Dodd and Barney “Thewe is nothing Wong with Fweddie and Fwannie” Frank made this. If they put into place a replacement system you know it is hosed.

You’ll defend Dodd-Frank to the death, wont you; and the Five Year plan and the Great Leap Forward too probably. Somewhere, if a government tries to regulate pricing and provision of a good or service, no matter what, buttplug, the one true libertarian, will defend it unconditionally.

What lie. Dodd was a Friend of Angelo who received interests rates for loans well below the norm and Bawney Fwank was a cheerleader for Fannie and Freddie and even used his power to get a boyfriend of his a job with Fannie. Those two were so corrupt it wasn’t funny. Any legislation these two put forward was bound to be nothing but a bastion of failure and corruption.

“absent or unavailable” doesn’t mean the position is vacant. It means the Director is in a coma or locked in a closet, or in prison or simply unable to perform his duties, as a temporary situation – like how the VP is president acts as the President if the President is in surgery, etc. Here the Director resigned, which created a vacancy. The acting director is then appointed by the President. I suppose if the President didn’t appoint an acting director the deputy would handle the day-to-day, buy in this case, one was appointed.

English should step aside and if she interferes, Mulvaney should fire her ass and have her escorted from the building by federal marshals.

Anyway, this situation is just another example of how deep state democrats believe they really are in charge of us and that should never change.

That was going to be my comment. A Director who’s term ends, who resigns or is removed is not “absent” or “unavailable” because he or she is no longer Director. The position is vacant. The law draws a distinction between a “vacant” position and an occupied position who’s incumbent is “absent” or “unavailable.”

Not without bailouts backing them up they won’t. When tophat wearing capitalist banker faces the prospect of standing in the soup line because he had to sell off his bank’s worthless assets at pennies on the dollar, or possibly zero cents on the dollar, he’ll act more prudently.

^ Fact. I can say this because a family member back in the 80’s ran a bank and…lost absolutely and literally everything because of their own malfeasance. Not saying they wouldn’t have done it again, although they probably wouldn’t have, but one certain thing is they never had the chance to try again.

Bailing them out made FDIC insurance out to be a lie, and furthermore taught banks that taxpayers will cover their bets even if it happens to come with strings attached.

Amazing, truly. Someone takes out a big fat loan he won’t be able to pay back; defaults, lives rent free for a few months before the bank foreclosed and takes a huge loss, and in Tony’s febrile mind, the borrower (and apparently everyone else) got raped by the bank?

If I were as dumb and dishonest as you, I’d accuse of being anti-Semitic and just looking for an excuse to blame the Jews for your mortgage payments.

I am torn… yes this is regulation and probably does get in the way of business. How many entities are making rules for businesses anyways? How would anyone keep track of such a specialized temple priest knowledge anyways? That is my biggest gripe with this, it makes more rules without synthesizing or simplifying anything done in the past. As a government worker (military) I am acutely aware of the governments tendency to throw additional rules on top of past rules when something bad happens. Rules are never drawn back and audits of activity are never done, everything is just expanded.

That being said, the corporations that enabled the 2008 financial crisis engaged in activity that was nearly criminal in nature then came crawling to the taxpayer with their hats out to rescue them. Now they complain about rules. Not sure it works that way, take the money and none of the repercussions.

My solution is simple. Make a simple rule that ends up with greedy fucks in prison if they try to engage in shenanigans like 2008. My gut feeling is financiers will be more careful about engaging in blatant greed sprees like they did prior to 2008 if they see their buddies in jail and shamed publicly for their activities. Let the banks police themselves by promising bosses who do not a warm cot in a federal penitentiary if they do not.

The legislation says that the deputy shall serve as acting director if the director is absent or unavailable, a condition that might seem to describe Cordray.

Except Cordray isn’t the director anymore, so it is not correct to say “the director is absent or unavailable”. There is no director in the first place. I don’t see how English’s claim even passes the laugh test, not that that will prevent Dem politicians and Obama admin flunkies like Laurence Tribe from supporting it.

As I understand it, Cordray is basically off the reservation. An ‘acting director’ is in place during the director’s temporary absence. Cordray just left without formally resigning, apparently just to fuck with the administration and subvert congressional oversight. In leaving he is the same sleazy turd he was in running that abortion of an agency.

The agency does not have two acting directors. It has one acting director, appointed by the President in accordance with the law. It has an deputy director, appointed by the dear departed, who can only function if and when the real director is ‘unavailable’. The deputy director also has a short career expectancy. In an ideal nation of laws, the agency itself would also have a short existence expectancy.